Carpe Diem

Some energy charts that weren’t included in “The Most Important Economic Stories of 2013 – in 40 Graphs,” but maybe should be?

As I was preparing this post of energy charts, I noticed that Matthew O’Brien at The Atlantic just published The Most Important Economic Stories of 2013—in 40 Graphs and guess what? Not one of the 40 graphs highlighted what might be not just one of the most important economic stories of 2013, but might qualify as the most important economic story of the last decade: The Great American Energy Boom. The amazing shale revolution taking place in America’s energy sector remains the strongest single sector of the US economy and provides the strongest reason to remain optimistic about America’s economic future.

I might do a more comprehensive group of energy charts later at the end of the year, but for now I would think any of the first three charts below would qualify to be included in The Atlantic’s graphs of the most important economic stories of 2013: a) US crude oil production in November was the highest in more than a quarter century, b) the US now has three active oil fields producing more than one million barrels per day, which qualifies them to join a very elite group of only ten super-giant oil fields in the world that have ever produced at that level, and c) natural gas production in the Marcellus region of Pennsylvania and West Virginia has increased almost 8 times in just the last four years, and that region now supplies 18% of America’s natural gas.

For now, here are my five energy charts, based on data recently released.

usoil1. The  Energy Information Administration (EIA) reported today that US crude oil production averaged 8.0 million barrels per day (bpd) in November, which is the highest monthly output since November 1988 (see chart above). The EIA expects US crude oil production will average 7.5 million bpd this year and 8.5 million bpd in 2014.

oilfields

2. Based on an EIA report yesterday, the US now has three elite, super-giant oil fields producing more than one million bpd as of December: Permian Basin and Eagle Ford in Texas and Bakken in North Dakota (just hit the 1 million bpd mark this month). In recent years, there have been only 7 oil fields worldwide producing at the one million bpd level, and three of those are in the US. The other four non-US super giant oil fields are Ghawar (Saudi Arabia), Burgan (Kuwait), Cantarell (Mexico), and Daqing (China). In the the 1970s and 1980s, super-giant oil fields in Russia (Samotlor) and Iraq (Kirkuk) (Iraq) produced more than one million bpd level, as did Prudhoe Bay in Alaska when its production peaked in 1979 at 1.5 million bpd.

marcellus3. The EIA reported yesterday that natural gas production in the shale-rich Marcellus region that covers Pennsylvania and West Virginia has experienced such a production surge in recent years that it will provide 18% of all natural gas produced in the country this month. Natural gas in the Marcellus region has doubled in less than two years, from 6.39 trillion cubic feet per day in February 2012 to an estimated output of 13.72 trillion cubic feet per day in January 2014. EIA data also shows that estimated natural gas production in the Marcellus region in January 2014 will have tripled since May 2011 (a little more than 2.5 years), and will have quadrupled in only three years since January 2011. Remarkably, Marcellus natural gas output has increased almost 8 times in just four years, from 1.74 trillion cubic feet per day in January 2010 to an estimated 13.72 trillion cubic feet per day next month in January 2014!

Capture4. Thanks to America’s new abundance of shale gas, prices in the US remain incredibly low compared to the rest of the world. As the map above shows, natural gas prices (in MM BTUs) are only about $3 in the US, and prices at 3 to 5 times higher in the rest of the world.

nd5. Thanks to the phenomenal energy boom taking place in North Dakota, the chart above shows the phenomenal housing boom taking place in the Peace Garden State. In October 1,459 building permits were issued in the state, which is a 49% increase from the same month last year, and almost 6.5 times the 225 permits issued four years ago in October 2009.

10 thoughts on “Some energy charts that weren’t included in “The Most Important Economic Stories of 2013 – in 40 Graphs,” but maybe should be?

  1. But weren’t all of the companies drilling in the Bakken and Eagle Ford suppose to be bankrupt by now – at least according to Vangel? What happened to that annoying nuisance? Is he crying himself silly in a boobie bar?

  2. Okay, just kidding. That wasn’t our friend V. But even though he was right for a couple of years during economic upheaval doesn’t mean the advice was correct for the long run.

    Still, with Obama’s EPA ready to pounce on any non-green energy source, I wouldn’t be too cocky about shale as a long term energy play. Obama has shown considerable ability to screw with the energy markets and create a debt situation for the U.S. that could make either a non-dollar currency or gold a better play in the future.

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